The latest EPW (August 11, 2012) reports a first-of-its-kind study at the University of Northern British Columbia, Canada, on the caste composition of the boards of the top 1,000 Indian companies (“Corporate Boards in India:Blocked By Caste?”, by D.Ajit, H.Donker, R. Saxena).
Analyzed are the largest 1000 Indian companies in terms of size (total assets in 2010) that account for four-fifths of the market capitalisation of companies listed in National Stock Exchange (NSE) and Bombay StockExchange (BSE).
The study finds that “nearly 93% of board members [of the 1000 top Indian companies] were forward caste members — 46% vaishya and 44% brahmin. OBCs and SCs/STs were a meagre 3.8% and 3.5% respectively.”
The study shows that “caste diversity is non-existent in the Indian corporate sector.” Nearly 65% of the Indian corporate boards, individually,are composed of just one single caste group among the forward caste groups indicating that it is a small and closed world.
The study concludes that “In the (Indian) corporate world, social networking plays an important role.Indian corporate boards belong to the ³old boys¹ club² based on caste affiliation rather than on other considerations (like merit or experience).”
The study says, “Caste is an important factor in networking. The small world of corporate India has interaction only within their caste kinship.This raises important questions about the possibility of interlocking of directors within the same caste among Indian companies. Is this small world of corporate directorships reflected in the selection of auditors as well?These are some of the important questions which are in the ambit of our future investigation.”
The article concludes, the “Indian corporate board consists of a small world dominated by forward castes and lacks diversity.”